Daily Insurance Industry News
Daily Insurance Industry News
Monday 24th of September 2018
February 2, 2010

Insurers face £13 billion jump in capital requirements

by Gill Montia

Story link: Insurers face £13 billion jump in capital requirements

EMB has published a study on the latest version of the proposed European Solvency II rules in which the consultancy firm concludes that UK property and casualty insurers face a combined £13 billion jump in capital requirements.

The new rules are due to come into force in 2012 and EMB warns that they could “seriously damage” the business models of several firms.

It is therefore advising insurers to undertake “specific parameter reviews” and build internal models tailored to each company.

Given these will be subject to regulatory approval, EMB warns: “The clock is already ticking and the results of our study should add further impetus to firms’ Solvency II implementation plans.”

The report sums up: “The cost of failure just became much higher.”

Responding to the study and the Solvency II directive, Michael Wainwright, partner at international law firm Eversheds says: “Weighing in at 312 articles, the directive is a substantial piece of legislation in its own right, but it is set to be dwarfed by massive amounts of subsidiary legislation which is only now being drafted.”

He adds: “As always, the devil will be in the detail, with real opportunities to gain competitive advantage for those insurers who can correctly predict how the negotiations on key technical issues will play out and adapt their operations and market positioning accordingly.”


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